Yes, I am amused in a smug way about Dell suddenly discovering that it has problems. See this story at Investor’s Business Daily, which mentions my Dell hell, and today’s New York Times reports on efforts to turn around the bilge-filled barge by finally adding customer service people. The brand is badly tarnished and a few PR efforts won’t fix that. I’m not sure what would. This week’s Business Week innovation special (sorry, can’t find the direct link online) has a simple chart showing the stock performance of the S&P 500 against stocks of companies with reputations for customer care: Starbucks, Target, and an airline (to be named later when I can find the damned link, if it exists) far outperformed the market. It’s so damned obvious: Serve your customers and win. Screw your customers and lose. The mob storming castle Dell was the surest leading indicator of problems at that company and Dell’s executives and analysts were blind fools if they didn’t see it.
Posts about Dell
Arstechnica reports that Dell’s growth has slowed in the U.S.
Dell, on the hand, did not fare as well. The company is still growing, to be sure, but not as fast as the overall market. During the first quarter, Dell’s worldwide shipments grew by 10.2 percent. That was still enough to keep the company in first place with 18.1 percent of the overall market. Perhaps most alarmingly for Dell, US growth for the quarter dropped under 1 percent [from almost 9 percent - ed]. At least the company’s increased focus on Asia and other non North American markets is paying off, as its international shipments grew to 23 percent vs. the overall market figure of 16 percent.
To this day, I get emails almost daily — in addition to blog links and blog comments — from poor souls who have had their own tales of Dell hell. It is a serious problem that will continue to cause problems for the company.
To all the nice folks who send me email asking for help: I wish I could but I am the last person to have any connection at Dell. I’m afraid there’s nothing I can do except sympathize… and recommend a Mac.
: LATER: Analyst issues sell rating for Dell. [via the comments]
: Also via the comments: Tom Peters finds Dell’s Peter Principle.
Watch out, Dell: John C. Dvorak is after you now. He writes a Marketwatch column noting the growing chorus of vocal victims and asks what’s wrong with Dell. He also nicely notes my Dell hell. Says Dvorak: ” Within the not-so-small confines of the powerful blogosphere there is a growing discontent with Dell and its once legendary customer service that could eventually hurt earnings. This situation might actually be at a crisis point already.”
By the way, Dvorak used to drive me occasionally batty — which is just his goal, of course — but I’ve come to appreciate him now that I listen to him on Leo Laporte’s This Week in Tech. He’s growly and funny and blunt.
Andrew Krucoff emails:
My friends and I shot a video for Spiers’ Wall Street blog and I outfitted my good friend Dennis Crowley (founder of Dodgeball.com) in a shirt I made which was inspired by you, of course.
Here’s the photo. Can’t wait for the video….
I blew my Mac power adapter in London. Was sitting under a plasma display at OPA, hooked into one of the only power strips there (London has too few plugs!), trying to get some juice and to blog and I heard a pfffft on the screen and suddenly saw that my power was gone. It so happens that I had an Igo power adapter with me (because I thought I might need it on the plane — belt, suspenders) and so I was OK to operate my Mac, but nothing was charging my batteries. Uh-oh. I whined about this to a few folks and they all wondered whether we were headed into Dell Hell, The Sequel.
Nope. I made an appointment at the Apple Genius Bar from London and went this afternoon. There was a bit of a wait on a Saturday (thanks in great measure to an old lady with a six-year-old Mac ahead of me who stretched a 5-minute question into a 40-minute symphony of repetition), but I had no on-hold Muzak and talked to a nice guy, face-to-face. He replaced my power adapter and showed me how to reset the power management unit and didn’t require me to go through a bit of bureacracy and now all is well.
Take that, Dell.
Yes, Dell’s profit rose in a snapshot but the clouds are gray:
…However, the double-digit growth rate does not portend a return to high growth for the company, the world’s largest seller of PC’s. … The conservative forecast for revenue growth dimmed analysts’ enthusiasm. “It was really a mixed bag,” said William Shope, an analyst with J. P. Morgan. “Impressive revenue growth came with a degradation of margins.” Dell’s gross profit margin was 17.8 percent, the lowest since 2002, said Mr. Shope. “The slowing growth and deteriorating margins could mean that 2006 will be a more challenging year than 2005 was,” said Brent Bracelin, an analyst with Pacific Crest Securities in Portland, Ore.
You can grow too big. And being the biggest isn’t the only way to make money. Sometimes, being the best still is.